Polkadot Price Up 4.3% – Time to Buy DOT Coin?

Polkadot has started the week blazing hot, time to buy DOT? When coins start to buck bearish trends, they immediately become more attractive to crypto investors. But, we all know trends never last. In this article, we’ll consider Polkadot and the recent bullish rally and whether the time is right to include DOT as part of your portfolio.

Polkadot: A Novel Approach to Blockchain Operations

Polkadot is a blockchain network that many in the industry have dubbed the “blockchain of blockchains.” The platform looks to solve the famous blockchain trilemma, and it applies an interesting approach to getting that done.

Polkadot relies on two primary infrastructures – parachains and the Relay Chain, instead of just building a chain. Essentially, the Relay Chain is the central point of everything in this ecosystem. The Relay Chain controls consensus, security, and cross-chain interoperability with other networks. Validators can also buy Dot – the native token – and stake it.

Parachains are custom-built blockchains that are connected to the Relay Chain. Parachains delegate their security and consensus to the Relay Chain. This structure makes them quick and less prone to congestion. Each parachain has its governance rules, but it will need to pass blocks that are comprehensible to the Relay Chain.

At the moment, over 100 parachains are connected to Polakado’s Relay Chain. At full functionality, the network should be able to process over a million transactions in a second. Add this to the optimal security and decentralization, and the blockchain trilemma is a thing of the past.

DOT – the platform’s native token – is another component that is central to everything concerning Polkadot. Users can buy DOT and stake it to vote on network upgrades. Stakers will also enjoy free DOT tokens from time to time in exchange for their work.

DOT: Price Movements in 2021

DOT was one of the coins to catch on in 2021 quickly. This made its rally especially impressive.

DOT started 2021 trading at $8.68, and the coin soon started an impressive rise. As more investors continued to buy DOT, its price spiked as it reached an all-time high of $49.87 on May 15. In the same period, DOT had entered the top 10 list on CoinMarketCap, beating coins like Litecoin and even XRP in the process.

Sadly, this didn’t last. The market downturn came, and the price of DOT soon plunged. Just a week after its all-time high, DOT declined by 72.5 percent to hit $13.67. Investors didn’t see a reason to buy DOT, especially with other large-cap coins seeing massive drops as well.

The drop continued, however. The crypto market went through several bullish cycles, and coin prices kept plunging. Eventually, DOT bottomed out at $10.346 on July 20, following a massive selloff in the market. This marked a drop of 79.2 percent from the coin’s all-time high.

Thankfully, the market rally has given DOT investors a reason to smile again. In the month since bottoming out, DOT gained 176.9 percent. The rise has continued since then, with more investors choosing to buy DOT as they look to diversify their portfolios.

Currently, DOT trades at $34.07 – up 4.34 percent in the past 24 hours but down 0.74 percent in the past week.

DOT: Technical & Fundamental Analysis

DOT’s technicals are above average. The coin’s price is well above its 20-day and 200-day moving averages (MAs) of $30.09 and $27.74, respectively, so there isn’t much stopping it from making bigger moves.

DOT’s relative strength index (RSI) also stands at 61.34 – still relatively underbought for a cryptocurrency. Investors are still confident to buy DOT, but the coin will need to pull in impressive numbers over the next two days to solidify their belief.

As for fundamentals, there’s not much to go by. Decentralized data aggregator SubQuery recently raised $9 million to improve the network’s data indexing – a move that will make Polkadot even better for developers.

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About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.